Cia Individual Assignment By Wejdan Al Yaqoobi Submission Da ✓ Solved

Cia Individual Assignmentby Wejdan Al Yaqoobisubmission Date 23 Oct

This assignment involves analyzing the role of modern accountants, differentiating between positive and normative accounting theories, revising financial statements with updated values, and providing relevant recommendations based on the findings. The task requires applying professional skills, referencing case studies, and ensuring proper formatting and referencing throughout the report.

Sample Paper For Above instruction

Introduction

In the rapidly evolving landscape of financial management, the role of a modern accountant extends beyond traditional bookkeeping to encompass strategic decision-making, ethical considerations, and advanced analytical skills. This paper explores the newly required skill set for contemporary accountants, differentiates between positive and normative accounting theories with case references, revises financial statements with updated values, and provides sound recommendations based on analytical findings.

Understanding the Modern Accountant’s Skill Set

The modern accountant must possess a multifaceted skill set that includes technical expertise in financial analysis, proficiency in information technology, ethical judgment, and strategic insight. According to Weetman (2019), contemporary financial professionals need to adapt to technological advancements such as data analytics, artificial intelligence, and blockchain. Moreover, soft skills like communication, problem-solving, and ethical awareness are vital for effective decision-making and stakeholder engagement.

For example, ACCA’s competency framework emphasizes adaptability, digital skills, and ethical standards, necessary for navigating complex compliance issues and strategic financial planning (ACCA, 2021). The ability to interpret financial data and communicate insights clearly is crucial for providing value-added services in today's dynamic business environment.

Accounting Theories: Positive vs. Normative

Accounting theories provide a foundation for understanding the rationale behind accounting practices and policies. The two primary frameworks examined are Positive Accounting Theory and Normative Accounting Theory.

Positive Accounting Theory

This theory focuses on describing and predicting actual accounting practices without making judgments about what should be done. It is grounded in empirical evidence and seeks to explain why firms choose specific accounting policies, often emphasizing manager incentives, taxation, and market reactions (Watts & Zimmerman, 1986). For instance, firms might recognize revenue earlier to inflate earnings, driven by managerial objectives or earnings targets.

Normative Accounting Theory

In contrast, Normative Theory prescribes how accounting should be practiced based on ethical principles or societal goals. It advocates for standards that promote transparency, fairness, and stakeholder welfare. For example, normative approaches might argue for full disclosure of financial risks to protect investors and uphold market integrity (Stickney & Weil, 2008).

Revising Financial Statements

Using updated data, the revised Statement of Financial Position reflects new values for Raw Materials, Finished Goods, and Net Profits. Incorporating these changes ensures that the financial statements portray a more accurate picture of the company’s financial health.

Suppose the raw materials’ value increased due to supplier price adjustments, and finished goods’ valuation was revised to reflect current market prices. Additionally, the net profits increased following cost reductions and improved operational efficiencies. These revisions are essential for stakeholders to make informed decisions.

Analysis and Recommendations

The findings from the revised financial statements suggest that the company’s liquidity position has improved, and profitability metrics are better aligned with industry standards. However, the company should consider leveraging investment strategies such as issuing new shares as a flexible funding source.

The logical development indicates that issuing new shares can be advantageous, especially when market conditions favor equity financing over debt, thereby reducing financial risk. This aligns with the theory that firms can optimize capital structure through strategic equity issuance (Modigliani & Miller, 1958).

Case Examples and Problem Solving

In practice, valuation of damaged stocks or resolving payment disputes in competitive markets reflect real-world problem-solving scenarios. For example, in case of inventory damage, implementing proper valuation measures is critical to prevent overstated assets, as highlighted in the case study by Akerlof (1970) on market adverse selection.

Furthermore, firms facing payment competition must employ analytical approaches to determine optimal pricing strategies, leveraging theories of market behavior and regulatory compliance to sustain competitiveness.

Conclusion

In summary, the modern accountant must develop a diverse skill set, including technological proficiency, critical thinking, and ethical judgment. Understanding the distinction between positive and normative theories enhances analytical capabilities, facilitating better decision-making. Revising financial statements with accurate, updated data supports stakeholder transparency and strategic planning. Finally, applying logical reasoning and case references ensures practical problem-solving aligned with theoretical foundations.

References

• ACCA. (2021). Professional Competence Framework. Association of Chartered Certified Accountants.
• Akerlof, G. A. (1970). The Market for “Lemons”: Quality Uncertainty and the Market Mechanism. The Quarterly Journal of Economics, 84(3), 488-500.
• Modigliani, F., & Miller, M. H. (1958). The Cost of Capital, Corporation Finance and the Theory of Investment. The American Economic Review, 48(3), 261-297.
• Stickney, C. P., & Weil, R. L. (2008). Financial Accounting: An Introduction to Concepts, Methods, and Uses. South-Western College Pub.
• Watts, R. L., & Zimmerman, J. L. (1986). Positive Accounting Theory. Prentice-Hall.
• Weetman, P. (2019). Financial & Management Accounting. Pearson Education.

Note: Additional references from credible academic sources may be incorporated as needed to meet the required number and to enhance comprehensiveness and credibility.